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UNITED FOOD & COMMER. WORKERS UNION v. PROGRESSIVE

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY


August 28, 1986

UNITED FOOD AND COMMERCIAL WORKERS UNION, Plaintiff,
v.
PROGRESSIVE SUPERMARKETS, Defendant; AMALGAMATED MEAT CUTTERS AND BUTCHER WORKMEN OF NORTH AMERICA, Plaintiff, v. PROGRESSIVE SUPERMARKETS, Defendant

The opinion of the court was delivered by: STERN

STERN, District Judge

 This matter comes before the Court on motions for summary judgment brought by plaintiffs in each case, and on a motion for partial summary judgment brought by defendants in the United Food case. After oral argument on June 9, 1986, this Court reserved decision. For the reasons stated below, plaintiffs' motions will be granted and defendants' will be denied.

 FACTS

 Defendant Progressive Supermarkets ("Progressive") decided on or about July 22, 1983 to liquidate all of its assets. Progressive's Board of Directors adopted a resolution authorizing the sale of all the stores. Progressive proceeded to cease operations and to withdraw from plaintiff pension funds in October 1983. Pursuant to ERISA, 29 U.S.C. § 1391(b) (1985), the Fund Administrator of the Participating Employers Tri-state Pension Fund assessed withdrawal liability against Progressive in the amount of $370,186.28. The Fund Administrator also set forth a schedule of payments pursuant to ERISA guidelines with the first payment due March 1, 1984. Progressive made only one payment for $6,846.42 in May of 1984.

 Progressive proceeded to request, pursuant to 29 U.S.C. § 1396 (1985), that the Fund recompute the withdrawal liability because of various alleged errors. Meanwhile, Progressive went into liquidation on July 17, 1984 and requested arbitration of the dispute over the withdrawal liability calculation on Nov. 2, 1984. No arbitration has taken place because counsel for both sides agreed to a stay pending the outcome of the present litigation.

 On October 2, 1984, the United Food and Commercial Workers Union together with the Participating Employers Tri-state Pension Fund filed the present action seeking relief from Progressive's failure to make withdrawal liability payments including interest, attorney's fees, and costs, and an order directing Progressive to make payments promptly. Following discovery, plaintiffs requested and received permission to file an amended complaint naming new defendants which are allegedly part of a "group of trades or businesses under common control" within the meaning of § 414(c) of the Internal Revenue Code.

 On September 24, 1985, the pension fund of the Amalgamated Meat Cutters and Butcher Workmen of North America notified Progressive of a withdrawal liability of $387,465. The Meat Cutters and its pension fund subsequently filed suit and received permission to join the present motion, relying entirely on the brief submitted by plaintiffs in the United Food case, as the motion raises issues common to both cases. Progressive now faces claims exceeding $750,000. It has deposited some $270,000 with the court, allegedly representing all of its remaining assets. In the plaintiffs' motions before the court, they claim that Progressive should be making withdrawal liability payments pending arbitration and that Progressive and a general partnership called B.E.G.M. Associates are a "single employer" within the meaning of ERISA, 29 U.S.C. §§ 1002(37)(B), 1301(b)(1) (1985). At the time of Progressive's liquidation in 1984, the ownership of Progressive and B.E.G.M. was divided as follows: PS BEGM William Margulis 33 1/3% 33 1/3% Edward Gold 27/78% 33 1/3% William Margulis as Trustee of Anna Margulis Trust n1 38.88% -- William Margulis Trust n2 -- 33 1/3%

19860828

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